A broker and bank-owned character appears near a House for sale in Phoenix, Arizona, January 4, 2011.
Credit: Reuters/Joshua LottCHICAGO | Thu 28 april 2011, 9: 18 am EDT
CHICAGO (Reuters)-funds to refinance home mortgages were much more available in predominantly white sections of large American cities than in minority areas following the recent housing crash, a study showed on Thursday.
Authors of the study called for more investment by lenders in poor communities and for enhanced disclosure requirements for mortgage lenders to protect unwary borrowers.
"To pay more for the American dream V," those found in the seven metropolitan areas included in the study--Boston, Charlotte, Chicago, Cleveland, Los Angeles, New York City and Rochester, New York--conventional mortgage refinancing in minority communities decreased by an average of 17% in 2009 in comparison with the previous year.
But in predominantly white neighborhoods, jump mortgage refinancing of loans with an average of 129 per cent.
This is the fifth in a series of reports that began in 2007, prepared by a coalition of non-profit groups throughout the country, including the reinvestment of California, the Woodstock Institute in Chicago and the Ohio fair lending coalition.
The study also found lenders "were more than twice as likely" to deny refinancing applications by borrowers in minority communities than in majority white neighborhoods.
Previous reports of the Coalition showed that during the recent property boom minority borrowers more likely to obtain high risk subprime loans than white Americans, were even if their credit was good.
"These findings build on our recent reports, which have documented current racial differences in mortgage loans," said Adam Rust, Director of the research to the Community Reinvestment Association of North Carolina, in a statement. "Lenders are loosening up credit in predominantly white neighborhoods, while Rob communities of colour remain vitally important refinancing need to assist their economic recovery."
Subprime loans--offered to borrowers with bad credit--and risky products such as "stated income", or "liar loans" where banks unverified borrower income, exploded during the housing boom. Irresponsible lending contributed to a housing market crash in 2007 that activated from America's worst recession since the great depression.
The crash resulted in an unpopular bailout plan for the u.s. banking sector that still has political consequences.
A separate study published in the American Sociological magazine in October found that predatory lending aimed at primarily minority neighborhoods led to massive foreclosures and directly contributed to the crash.
(Edit by Doina Matei)
No comments:
Post a Comment